NEWS: Energy markets, Resource planning
E3 Supports MISO in Capacity Market Design Filing

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April 3, 2024

As competitive electricity markets transition to higher shares of renewables and energy storage, it is critical for both reliability and economics that markets accurately value resources in their ability to provide capacity.  E3 is proud to support the Midcontinent Independent System Operator (MISO) in its landmark filing to the Federal Energy Regulatory Commission (FERC) to reform the method used to accredit the capacity of generation resources. E3 worked closely with MISO to develop an updated capacity accreditation framework that 1) ensures reliability 2) is economically efficient 3) is fair/equitable and 4) implementable. The final product of this effort is the “direct loss of load” or “DLOL” method that values each resource’s marginal contribution to system reliability, a significant departure from the traditional “peak-based” methods that assume reliability risk is driven by peak load hours. Instead, the DLOL method is an adaptable and sustainable method that evaluates all hours to identify the hours with highest reliability risk (generally in periods of high load combined with low generation resource availability) and accredits the capacity of resources based on their availability during these periods.

E3 Senior Director Zachary Ming developed expert testimony on behalf of MISO that provides supporting evidence on the DLOL method, why it meets the principles of sound capacity market design, and why FERC should approve the proposed changes to the MISO tariff.

filed under: Energy markets, Resource planning